Brian Cowen (Laois-Offaly, Fianna Fail)

It is important to point out that the question of holding a debate on the European issue and the economy is something I should welcome during the course of this term, whenever it ends. It is important to have such that debate.

In putting matters in perspective I am not suggesting we ignore the challenges, which the Government is very much aware of, but rather that we emphasise the need for a strategic approach as regards how to get through the present impasse. As an open economy we cannot suggest that we can be immune from developments elsewhere. Higher commodity and oil prices must have an impact on every economy. How we deal with that, in terms of maintaining competitiveness, is not to suggest it is not happening by providing rebates all over the place indicating we can do this while our competitors do not. That will not maintain competitiveness but postpones the day when we have to take on board the reality of higher oil prices impacting on the economy, the same as everywhere else. It is wrong to believe this would provide a palliative or solution.

It is one of the proposals that came from the Opposition benches and is precisely what we should not do because the benefit will not go to the consumer anyway. The real issue involves continuing with the capital programme and investment, for example the approval in 2007 of €23 billion of investment under the national development plan. This was not exclusively capital investment, but also current in trying to build up skills, invest in education, improve physical infrastructure, proceed with the public transport projects and make contributions as an offset, not full compensation, for the reduction in some aspects of private sector activity, particularly in construction. This activity has to be maintained in an overall budgetary context that is sustainable. It is true that as we face into this year and next, in particular, we will have to take whatever temporary adjustments are necessary to maintain a sustainable budgetary position.

On the basis of our base of activity which has greatly increased in recent years, in health, education, social welfare or whatever, we are talking about hugely increased current investment as well as capital side expenditure. We must maintain a capital spend commensurate with what is needed to continue to deal with the deficits in physical infrastructure, which have been historic because of the past unavailability of resources. We must also seek to maintain budgetary discipline as well in respect of expenditures already authorised for this year — expenditures that were too great, according to the Opposition's critique. Other Members, however, have said they were inadequate. In fact they have provided a stimulatory impact equivalent to 1.25% of 1.5% growth.

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